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Duterte reduces, condones real property taxes of independent power producers

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Duterte reduces, condones real property taxes of independent power producers

PRESIDENT Rodrigo Duterte has ordered the reduction and condonation of real property taxes and penalties assessed on power generation facilities of independent power producers (IPPs). 
 
According to Executive Order (EO) 126 signed by President Duterte on March 4, “all liabilities for real property taxes, including any special levies accruing to the Special Education Fund, for calendar year 2020, on property, machinery and equipment” directly used by IPPs for the production of electricity will be reduced to an amount equivalent to the tax due if computed based on an assessment level of 15 percent of the fair market value of the said property or equipment, depreciated at the rate of 2 percent per year, less any amounts already paid by IPPs.
 
“As the operations of affected IPPs contribute largely to tax revenues for the national government and LGUs (local government units) and provide grid capacity of around 3,100 megawatts, their closure or non-operation will entail substantial losses to the government and force resort to more costly power source alternatives or the implementation of power outages,” the EO reads.